Oil Prices Dip as Middle East Exports Recover Pre-War Levels

Oil prices have retreated slightly as Middle East supply routes show signs of recovery. Data from JPMorgan reveals that crude shipments through key regional chokepoints have rebounded to 98% of pre-war levels, contributing to the market softening. West Texas Intermediate (WTI) crude is now trading near $89 per barrel, while Brent crude has settled around $100 per barrel.

The market easing follows reports that Middle East crude exports have reached 17.5 million barrels per day. Refined product flows, including diesel and gasoline, have recovered to 3 million barrels per day, representing 58% of pre-war volumes. Gulf oil producers are navigating heightened maritime security risks to move crude through the Strait of Hormuz, with Iraq seeking additional tanker capacity and Kuwait confirming its crude production has restored to approximately 75% of pre-conflict levels.

Saudi Aramco has instituted sharp price cuts for its flagship Arab Light crude grade bound for Asian buyers in November, signaling growing physical supply availability. Meanwhile, the US Dollar Index (DXY) climbed to 102.5, reaching its highest level since April 2025, driven by a weakening euro amid political uncertainty in Spain and fiscal instability in France.

The US dollar gained despite softer economic indicators, including September US non-farm payrolls showing an addition of 29,000 jobs against expected forecasts of 90,000, alongside an elevated unemployment rate of 4.2%. Financial markets are pricing in an 80% probability that the Federal Reserve will hold interest rates unchanged at its upcoming meeting. In foreign exchange markets, the USD/MYR currency pair adjusted to 4.0920, reflecting broader greenback movements against regional currencies.